Chewy shares surge 21% on Q1 results, raised 2024 margin outlook

Shares in Chewy (NYSE: CHWY) surged more than 21% at the market open Wednesday after the online pet food retailer reported better-than-expected Q1 numbers, raised full-year margin outlook, and announced a new share buyback plan.

Chewy posted earnings per share (EPS) of $0.31 in the quarter, beating the consensus estimates of $0.27. Revenue came in at $2.88 billion, also above the consensus projection of $2.86 billion.

Adjusted EBITDA stood at $162.9 million, surpassing the expected $114 million. The net margin came in at 2.3%, higher than the estimated 0.83%.

Looking ahead, Chewy projects Q2 2025 revenue to be between $2.84 billion and $2.86 billion, compared to the $2.86 billion projected by analysts.

For the full fiscal 2024, Chewy forecasts revenue between $11.6 billion and $11.8 billion, compared to the consensus of $11.76 billion.

Adjusted EBITDA margin outlook for the full year has been raised to a range of 4.1% to 4.3%, up from the prior guidance of 3.8%.

"We are encouraged that mgmt is able to expand margins in a softer top-line environment," JPMorgan analysts said in a post-earnings note.

The retailer also said that its Board of Directors has approved a share repurchase plan of up to $500 million of its Class A and/or Class B common shares.

"Overall, while Active Customers are still declining, mgmt is proving it can still grow revenue & improve margins in a volatile macro backdrop, & will soon return capital to shareholders," JPMorgan added.

By Vahid Karaahmetovic

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